Apple Computer is currently testing new video
compression software that will eventually improve its QuickTime Player.

The company said the technology, known as MPEG-4 part 10 or H.264/AVC, is the
next-generation video compression technology in the MPEG-4 standard. Already
ratified by both the ITU and ISO MPEG, Frank Casanova, Apple Senior
Director, QuickTime Product Marketing, told internetnews.com that the
company is pole-positioning the improvements as the standard for video
encoding for everything from 3G to High Definition (HD) broadcast.

"We took the basic recipe and we're now testing it internally on our
campus in Cupertino, Casanova said. "We're not shipping it yet. It's not a
question of 'if', only a matter of 'when.'"

Earlier this year, Apple demonstrated MPEG-4 part 10 showing content
encoded at full HD resolution (1920x1080 24 frames progressive) and played
back between 6.8 and 8 Mbps on one of Apple's current dual-processor
computers. The company suggests that H.264/AVC is the likely successor to
MPEG-2, which is still the industry standard.

MPEG-4 has come into conflict in the past with Microsoft's Windows Media
Player 9 and its FastStream technology, which like Apple's Instant-On,
eliminates buffer delays. Earlier this month, Microsoft released its Windows
Media Player 10 beta with digital rights management technology, code-named Janus.
The technology, expected to ship later this year, will also feature full
support for the coming Portable Media Center.

"Apple's pursuit of standards is a new leaf for them," Mike McGuire,
Gartner Research Director, told internetnews.com. "Their view is
that digital media is going to extend to other formats and players and they
are looking at the new opportunities for distribution channels. That
long-term strategy is an interesting opportunity for them."

McGuire said the key for Apple is its work to push its QuickTime
Streaming Server as a backside technology.

"They don't take for granted that Europe, Japan and the Asia Pacific
regions have been demanding more content on their mobile phones," he said.

The Cupertino, Calif.-based computer maker is beaming about the progress
that QuickTime has been making compared to alternatives like Microsoft
Windows Media Player and RealNetworks
Real Player.

A recent report on media player market share sales for client and enterprise applications by research firm Frost & Sullivan showed Apple moving into second position with
36.8 percent of the market, after running a distant third a few years ago. That puts Apple above Real, which controls 24.9
percent and not too far off from Microsoft and its share of 38.2 percent.

Casanova said the market share does not include formats such as enhanced
CDs, digital camera support software, end-user titles, PDAs like the Sony
Clie, or even AOL 9.0 because tracking the sales is too difficult for any of the three players to track.

Apple also issued a statement Thursday saying more than 250 million
copies of QuickTime version 6 have been downloaded since its 2002 release.

Frost & Sullivan industry analyst Mukul Krishna said almost everyone has
all three players on their computer, not wanting to be locked into just one format.

"The only impediment is infrastructure," Krishna said. "There are still a
whole lot of analog products but that has been changing as the FCC started
its push for the digitization of content."

Krishna pointed out that the main determining factor when choosing a
media player will be how well it handles Video over the Internet
and applications build for the mobile market.

"The feedback we have gotten is that analog is enjoying continued
support," he said. "Windows Media Player 9 and QuickTime with MPEG 4 will be
there in the future but there is a slight bend towards Apple's MPEG 4
because it is a non-Microsoft product."

In related news, Apple updated its iTunes music player to version 4.6.
The upgrade helps support the company's AirTunes music sharing software.
Casanova said Apple's iTunes platform is a major factor in the spread of
QuickTime.